Geared to a Main Street audience, this e-newsletter will provide a sampling of the latest speeches, research, podcasts, videos, lesson plans and much more. Sign up now to have this emailed to you monthly at no charge.

The Econ Lowdown e-newsletter is the most convenient way for economics and personal finance teachers to stay up-to-date on the latest videos, podcasts, curriculum, classroom activities and events from the St. Louis Fed.

Below is a full transcript of this video presentation. It has not been edited or reviewed for accuracy or readability.

Julie Birkenmaier: All right. Well, thank you so much. We are now open for questions. Please, please.

John Duca: I have a question for Wenhua.

Julie Birkenmaier: And please introduce yourself.

John Duca: Hi, I’m John Duca, Dallas Fed. Quick question for Wenhua and this relates to liquid assets. I’ve been impoverished, in terms of liquid assets, my entire adult career. Part of it is I work at the Fed. But in all seriousness, some people use credit lines, unused credit lines as a backup source of liquidity and it might be interesting to segregate–to see if we can pull that data out of the SCF because those without liquid accounts and without credit lines, they really are–their backs, literally, are up against the wall. And the other thing to consider is a lot of young adults are living with their folks. Co-residence rates have risen a lot. We call that purgatory. But, their finances, to some extent, are blended with their folks in a certain sense is family insurance and they may behave differently than some of the other parts to your sample. These two suggestions, I think, would only help you sharpen your estimates.

Wenhua Di: Great suggestion. Thank you very much. We actually heard a paper about, you know, young folks going back to live with their parents and then it is an issue we’re going to look into and see whether we can’t identify to what extent in the SCF we’ll be able to identify those folks and how that really tell us about the options they have. Thank you, John.

Julie Birkenmaier: I think we have time for one more question, two more questions. In the back?

Greg Housel: Greg Housel with the FDIC, Kansas City. I’m interested in the optimal rate for savings account. I was teaching the other day for Teach Children to Save for the Fed and I went to multiple schools, low income area multiple schools and middle and upper income areas. I was teaching first grade in the middle and upper income areas to multiple classes. Almost every child had a bank account, savings account, almost every one. I go to third classes in the low income areas and almost no one had a bank account. And well, so I’d say the base size was 300 children. So, there actually was–you know, this wasn’t one or two classes. And so, my question is when we’re opening this and we’re establishing savings’ patterns with youth, what do you think the optimal age is?

Terri Friedline: Hello. So–and I’ll explain from my biased perspective as, you know, someone who has grown up under the good work of Michael Sherraden and the colleagues at Center for Social Development and along with the proposal to automatically and universally open those accounts at birth. I think the ideal age in which a young person can interact with that savings account is actually much earlier than we often think about. So, by the time a child is age 5, they already know–they’ve already bought into our social norm that saving is a good thing. They know how to count numbers. They know that that savings account and saving for college–they know that college is expensive already at 5 and so they–and they know that the savings account can be a potential strategy for helping them get theirs–is a way, generally, that–you know, they know that money is important for college, for paying bills, and that–and the savings account is a place where you put money. And so, kids make some of these very kind of beginning and nascent connections between saving and the future. And I think that that is a time that we should consider leveraging more. I think that young adulthood is really much too late to start thinking about how we connect people, generally, to the financial mainstream. So, I’ll stop there I think.

Female: Yeah. I would chime in with Terri on that. I just share with you guys a little story. I did this project and I was actually calling on a lot of bankers who were offering school-based bank branches. Right? They were offering children’s savings accounts basically. And what’s striking to me that I would say 9 out of 10 bankers that I talked to, the reason that they had these savings accounts for their K through 12 students was because they recalled when they were that age what it meant for them to have that little passbook and that instilling of the savings and what that can do whether–you know, the tradeoffs that come from that. So, I think, like, the sooner the better in life if you can and the certain K through 12 has long standing positive impacts I think by my few observation.

Julie Birkenmaier: All right. Unfortunately, I believe we are out of time, but please join me in thanking our panel and discussants. [Unintelligible at 00:05:31].